Analysis: N.J. gas tax still taboo

New Jersey commuters should get used to idling in traffic, making sudden detours when a bridge fails an inspection and standing on overcrowded railcars.

That’s because the $1 billion state fund that pays for transportation upgrades is tapped out, able to pay only the debt it has accrued over the past decade and leaving a transportation system ranked among the worst in the country with little money for repairs and improvement. And there is no political will in Trenton, by Republicans or Democrats, to increase New Jersey’s 10.5-cent-per-gallon gasoline tax, which provides the main cash for the state Transportation Trust Fund.

With Governor Christie seeking a second term this year, and gearing up for a possible presidential run in 2016, he is unlikely to push to raise the gas tax. In fact, he’s repeatedly dismissed talk of increasing the tax, even when asked in the wake of superstorm Sandy if it could be a tool to help fund the state’s recovery.

And Democrats, who control the Legislature and have been critical of how Christie has handled transportation spending, have not put forward a plan to fix the state’s transportation problems. They too lack the political courage to push a tax hike, especially with all 120 seats in the Legislature on the November ballot this year.

“The simple reality in New Jersey is that even when it’s obvious there’s a need, New Jerseyans are dubious about it because they feel they’re already paying high taxes,” said David Redlawsk, director of Rutgers University’s Eagleton Center for Public Interest Polling.

But the decision to hold back from increasing a gas tax that has not been raised in more than two decades — and is now the nation’s third-lowest — has not come without consequences. For the first time in the nearly 30-year history of the Transportation Trust Fund, none of the motor fuels tax drivers pay at the pump will translate into road improvements. New Jersey also levies a 4-cents-per-gallon gross receipts tax on petroleum refiners and distributors.

Much of the financial burden over the past 10 years has been pushed onto borrowing, even though New Jersey already carries the third-highest debt load of any U.S. state, behind only New York and California. And New Jersey’s bond rating was lowered in 2011, in part due to its heavy reliance on debt, with only Illinois and California now getting worse credit ratings.

New Jersey’s roads and bridges, meanwhile, show heavy wear a decade after Gov. James E. McGreevey, a Democrat, organized a blue-ribbon panel that called for a 12.5 cent increase of the state’s gas tax, a proposal that was ultimately rejected by politicians.

Just last September, Bergen County crews were scrambling to make emergency repairs on the Anderson Street Bridge that connects Hackensack and Teaneck. The deterioration had reached a point that the county placed weight restrictions on the bridge that forced NJ Transit to detour its buses, causing disruptions for riders who could no longer board at certain locations.

And in February, state Transportation Commissioner Jim Simpson announced that following the 2014 Super Bowl in the Meadowlands, the Department of Transportation would be closing northbound lanes on the Routes 1&9 Pulaski Skyway for two years. Hudson County officials have said the plan will create great disruptions to residents.

In all, nearly 70 percent of New Jersey’s roadways are in either poor or mediocre condition, according to a new report card from the American Society of Civil Engineers. That costs New Jersey motorists $601 on average each year, and $3.5 billion annually as a group, the engineers estimated.

The bridges are also a trouble spot, with 651 rated “structurally deficient” and more than 25 percent “functionally obsolete,” the engineers said.

Janna Chernetz, New Jersey advocate for the Tri-State Transportation Campaign, a New York-based watchdog group, said the Pulaski Skyway project is an example of “what happens when you don’t keep up with maintenance.”

Another consequence is that costs, including those for oil and construction materials, rise even while the funding for improvements remains stagnant, she said.

“We’re jeopardizing the number of projects that can be done,” Chernetz said. “We’ve got a backlog of bridges that need to be fixed. Funding for NJ Transit needs to be increased as ridership is increasing.”

Finding a better way to upgrade New Jersey’s transportation infrastructure was one of the key issues raised by Chernetz and other advocates during a recent legislative hearing on the $32.9 billion budget Christie put forward in late February for the fiscal year that begins on July 1.

Though the state still plans to spend the same amount on transportation capital projects, Christie did not include a promised $375 million of general fund revenues for transportation spending and will instead rely on bond premiums raised through higher interest rates to fill the gap.

Cathleen Lewis, spokeswoman for AAA New Jersey Automobile Club, said the state needs to not only boost the gas tax, but also find a new source of revenue.

She said motorists also need to get the message: “If you’re using the roadways, you should be investing in fixing the roadways.”

The reality is, because of prior borrowing, all of today’s gas tax revenue is paying off projects completed “five, 10, 15 years ago,” she said. “And we have a lineup of projects we need to get done now.”

On the other end of the spectrum are conservatives who oppose increasing the gas tax. They’re also upset that Christie didn’t live up to his 2011 promise to increase the transportation spending that comes out of the annual state budget, which is known as “pay as you go.”

“We need to stop borrowing money to pay for every project,” said former Bogota Mayor Steve Lonegan, the head of the conservative Americans For Prosperity organization in New Jersey and a leader in the push against McGreevey’s proposed gas tax hike a decade ago.

New Jersey is not the only state wrestling with transportation funding.

Maryland’s first gas tax increase in 20 years cleared a state Senate committee on Thursday. And Maryland’s current tax of 23.5 cents per gallon is more than double the direct tax on a gallon of gas motorists pay in New Jersey.

In Virginia, Republican Gov. Robert F. McDonnell wants to ditch his state’s 17.5-cent-per-gallon gasoline tax altogether and instead boost the state sales tax, while also applying it to gasoline purchases. He would also charge owners of cars that use alternative fuels, who wouldn’t be buying gas, a $100 annual fee.

“I think he’s raised the debate,” said Sam Crane, a former New Jersey state treasurer under Gov. Jim Florio.

“There are a lot of revenue alternatives once you get over that this is a service provided and the revenue is related to the service,” he said.

“Unfortunately, the debate [in New Jersey] has been over how much of a gas tax we have instead of — we have a service, we value the service, and we’re willing to pay more,” Crane said.

Chris Daggett, a former independent candidate for governor in 2009 who leads the Geraldine R. Dodge Foundation, said elected officials will listen to frustrated commuters who press them for change.

“Politicians have a pretty good ability to respond to the demands of the public,” Daggett said.

But they still have much work to do in New Jersey. Taxes were identified as a top concern by 43 percent of the state’s voters surveyed for a recent Quinnipiac University poll. Roads and infrastructure garnered only 2 percent.

Redlawsk, the Rutgers pollster, said no one should expect Christie to advance a higher tax in New Jersey this year, or even in the next few years assuming he wins reelection in the fall. As long as the popular governor — he registered a 73 percent approval rating in the latest Rutgers poll — still has national ambitions, any tax hike is out of the question, said Redlawsk, who noted the first 2016 attack ad has already been aired in Iowa, going after a GOP candidate for hiking taxes.